ICROFS has prepared a comprehensive survey of the Danish organic sector and its future prospects, and an assessment of what barriers are the most important to overcome in order tosecure the future of organics.
The knowledge synthesis shows that organics has a strong foothold in Denmark: the consumers demand organic products, the retail business is very open to organic products, organic production gives good economic results for the producers, and there is room for much more organic agriculture in Denmark.
A large obstacle in the path forward is the conversion to organic production. The demand for organic products is larger than the production in Denmark. The primary producers hesitate in their reaction to the market signals and the conversion is too small. This means that there is an unused potential in both the home and export markets. But there are also other obstacles. The knowledge synthesis therefore recommends five essential, long term strategic efforts that are to secure the future for the organic sector in Denmark.
The four positive conditions of life for organics
The recommendations are based on a range of grounds or preconditions, which the work has exposed. According to the knowledge synthesis, the market based organic sector in Denmark rests on four fundamental conditions.
1. There is a value based market
The market opportunities for organic products are exceptionally good today, and there is a large growth in retail trade. The export has only gone up marginally, while there has been a large increase in import. In Denmark, the latest mega trends in the food area have moved consumption to a focus on value based consumption, away from size and toward 'meaning', 'healthy food' and 'decent food'. The demand for organic food is connected with symbolic aspects and global responsibility by a relatively large consumer segment, which has a fundamental trust in the organic actors.
2. Retailing interest stimulates innovation and product development
The knowledge synthesis shows that many retail businesses now use organics a part of their strategic profile and branding, because organic consumers belong to the trendsetters in food. There has been a positive market innovation that has increased the availability and visibility of organic goods. The new interest and the increased organic sale within the retail business have stimulated the interest in innovation and product development in the processing industry. This has created room for a range of smaller organic companies, but they need to be backed with knowledge in many areas.
3. Organic production gives good economic results
In general, organic production gives a higher operational income that conventional production. On average, organic full time crop farms, dairy farms and pig farms all have higher contribution margin and income than comparable conventional farms. In spite of this, there has been a very limited conversion to organic production in later years. The motivation for conversion has fallen among conventional farmers. In 2007 there has been a slight increase in the organic production area and a net gain of some forty farms, but the supply situation still needs to be substantially improved.
4. There is room for much more organic agriculture in Denmark
Geographically speaking, there are very good prospects for a larger organic production in Denmark. In example, there is room for a quadrupling of the organic dairy production based on the existing dairy farms, and there would still be room for much more meat and crop production. Organic agriculture could contribute substantially to the conservation of natural values and the promotion of biodiversity. There is some overlap between the areas with a large potential for organic production and the areas with particular societal obligations and challenges as concerns nature protection and the development of landscapes and rural areas.
Five strategic efforts
Based on the present situation of the organic sector, the knowledge synthesis recommends five important focus areas where an effort should be made, in order to secure the organic market of the future.
1. Strengthen the positive dynamics in processing and sale
The market is ready for more organic products. Value based demand from the trendsetting consumer evokes a response in retailing, and the interest within retailing stimulates processing companies and producers. The present positive dynamics in the market must be continued and strengthened, for one thing, by support of product development.
2. Organic intensification – conversion lags behind demand
There is a pressing need of a targeted, long term effort for increased conversion to organic production. The effort should focus on communicating an attractive and visionary image of organics as a future part of agriculture, and creating better conditions for conversion through long term contracts. In addition, new types of organic farms should be developed, which combine organic intensification with multifunctionality and new forms of cooperation between specialised operations.
3. Maintain and strengthen consumer trust
The knowledge synthesis shows that consumer trust is crucial to the development of the organic market and production system. Trust must be maintained through a continued improvement of methods of production and processing in line with the organic principles. And an open and participatory communication with consumers must be ensured.
4. Create synergy between organics and society
Methods of organic production can contribute to the promotion of nature and biodiversity and the reduction of aquatic pollution and emission of greenhouse gases. A larger distribution of organic farming can have a particular effect on biodiversity in selected areas, where there is a special need of protection.
There are also opportunities for combining protection of environment and nature with production of bio energy and development of new special products. More organic farmers could open their farms to visitors in order to combine nature experiences and interactions with farming.
5. Honour the great need for new knowledge
The knowledge synthesis points out that there is a large need for continued research and expansion of knowledge in order to advance the development of organic food production and food systems. Important areas of development are synergies between different organic operations, organic intensification, deliberate use of diversity in and around the fields and improvement breeding, as well as processing and micro processing and the sectors contributions to nature, environment and rural development.
More information
Citation
- Alrøe, Hugo Fjelsted and Niels Halberg (2008): Development, growth and integrity in the Danish organic sector. A knowledge synthesis on the opportunities and barriers for a continued development and market-based growth in production, processing and sale of organic products. Summary in English. ICROFS in-house report No. 2/2008. ICROFS, Tjele, November 2008. Available at http://www.icrofs.org/pdf/synthesis_08.pdf
Table of contents
1 Introduction
1.1 Objectives
1.2 Empirical basis
1.3 Background
2 Main barriers and possible solutions
2.1 Demand and consumer confidence
2.2 Marketing and processing
2.3 Conversion to organic primary production
2.4 Development of the primary production
2.5 Nature, environment and society
3 Recommendations for future efforts
3.1 More new products on the shelves
3.2 Increased production of organic produce
3.3 Consumer confidence and credibility
3.4 Synergy between organics and society
3.5 Research in strategically important areas
4 List of background chapters
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